Fool contributor Travis Hoium has taken a view of Amazon (NASDAQ: AMZN ) stock that's contrary to that of most of his fellow Fools. But falling margins in the first quarter and massive investments in streaming content have him thinking that profits will continue to be elusive for Amazon going forward. Travis covers the biggest reasons he's short Amazon stock in the video below.
Everyone knows Amazon is the king of the retail world right now, but at its sky-high valuation, most investors are worried it's the company's share price that will get knocked down instead of competitors'. The Motley Fool's premium report will tell you what's driving the company's growth, and fill you in on reasons to buy and reasons to sell Amazon. The report also has you covered with a full year of free analyst updates to keep you informed as the company's story changes, so click here now to read more.
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Report this Comment On June 18, 2013, at 6:53 PM, playForever wrote:
Amazon now faces tough competition. I noticed all my friends purchase less and less from Amazon after it started collecting sales tax in CA. Its price no longer has advantage now compare to the local retailers, and local retailers have the convenience of return and exchange.
Its digital media business is getting more competition from Apple, Google, and some smaller players, such as B&N. Even phone makers, Nokia, Samsung and Sony want to do the online music.
Its growth story is about end because its growth ratio become smaller and smaller every year, every quarter. Next quarter it year over year growth ratio will be in teen level.
Report this Comment On June 18, 2013, at 9:13 PM, MFMotleyStool wrote:
Obviously AMZN does not trade on it's fundamentals and plus as the Fool referred to they don't count their fulfillment and content costs when they report their fictitious margins. He is dead on in his analysis but the HFT and ETF investors don't seem to care. It is the only stock that I know of that over an extremely long period of time has not traded in accordance with it's fundamentals, otherwise it wouldn't be over $100.
There is no there there, just a company that has been rewarded for increasing sales without generating real profits.
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